IN THE OHIO SUPREME COURT CASE NO IRENE F. PATEREK, et cet., et al. Plaintiff-Appellee, PETERSEN & IBOLD, et al., Defendants-Appellants.

Transcription

1 IN THE OHIO SUPREME COURT CASE NO IRENE F. PATEREK, et cet., et al. Plaintiff-Appellee, V. PETERSEN & IBOLD, et al., Defendants-Appellants. APPEAL FROM THE GEAUGA COUNTY COURT OF APPEALS, ELEVENTH APPELLATE DISTRICT COURT OF APPEALS CASE NO: 2005-G-2624 MERIT BRIEF OF APPELLANTS PETERSEN & IBOLD AND JONATHON EVANS LEON M. PLEVIN EDWARD FITZGERALD Plevin & Gallucci 55 Public Square, Suite 2222 Cleveland, Ohio (216) Fax (216) Attorneys for Plaintiff-Appellee PAUL W. FLOWERS Paul W. Flowers Co., L.P.A. Terminal Tower, 35`h Floor 50 Public Square Cleveland, Ohio (216) Fax(216) Attorney for Plaintiff-Appellee TIMOTHY D. JOHNSON ( ) GREGORY E. O'BRIEN ( ) Weston Hurd, L.L.P Tenninal Tower 50 Public Square Cleveland OH (216) Attorneys for Defend 241 '. ^ -Appellant, ^^Ll LO IAR NICHOLAS D. SAT JOSEPH W. BORCH 1RClA J, MENGFL Reminger & Reming CO(IR CLERK 525 Vine Street, Suite r-.et OF ON10 Cincinnati, Ohio (513) Attorneys for Amicus Curiae Ohio Association of Civil Trial Attorneys

2 ALAN M. PETROV TIMOTHY J. FITZGERALD MONICA A. SANSALONE Gallagher Sharp Bulkley Building, Sixth Floor 1501 Euclid Avenue Cleveland, Ohio (216) Fax (216) Attomeys Amicus Curiae, Minnesota Lawyers Mut. Ins. Co. JASON WINTER Janik & Dorman, L.L.P South Hills Blvd., Suite 300 Cleveland, Ohio (440) Fax (440) Attomey for Amicus Curiae Zurich Insurance Company

3 TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ii STATEMENT OF THE FACTS...1 ARGUMENT IN SUPORT OF PROPOSITION OF LAW...5 Proposition of Law: In a legal malpractice action arising out of an alleged failure to competently prosecute a civil lawsuit, recovery for the lost opportunity to collect in the underlying litigation cannot exceed the damages Plaintiff would have collected had the attorney defendant not been negligent...5 CONCLUSION... : PROOF OF SERVICE APPENDIX Appx. Notice Of Appeal To The Supreme Court of Ohio Case No (September 27, 2006) App.-1 Judgment Entry, Geauga County Court of Appeals, Case No G-2624 (August 14, 2006) App.-18 Opinion Geauga County Court of Appeals, Case No G-2624 (August 14, 2006) App.-19 Judgment Entry (Defendant's Motion for Judgment NOV), Geauga County Common Pleas Case No. 02 PT (February 16, 2005)... App.-33 Decision (Defendant's Motion for Judgment NOV), Geauga County Common Pleas Case No. 02 PT (February 16, 2005)... App.-34

4 TABLE OF AUTHORITIES Cases Augustine v: Adams (D.Kan.1997), 1997 WL Ballesteros v. Jones (1999), 985 S.W Canis v. Fleps (Jan. 6, 1992), Mahoning C.P. No. 88 CV Copp v. Atwood (Jan. 24, 2005), D.N.H. No JD, unreported, 2005 WL Cunningham v. Hildebrand(2001), 142 Ohio App.3d 218, 755 N.E.2d :. 5 DiPalma v. Seldman (Cal.App.1994), 27 Cal.App.4"' Eno v. Watkins (Neb.1988), 229 Neb. 855, 429 N.W.2d Fernandes v. Barrs (1994), 641 So.2d Fred Siegel Co., L.P.A. v. Arter & Hadden (1999), 85 Ohio St.3d 171, 707 N.E.2d Garcia v. Kozlov (2004), 179 N.J Jenkins v. St. Paul Fire & Marine Ins. Co. (La.1982), 422 So.2d Jernigan v. Giard (Ma.1986), 398 Mass. 721, 200 N.E.2d : Jourdain v. Dineen (Me.1987), 527 A.2d ii

5 Kemin Ind. v. KPMG (2002), Iowa App. No. WL , unreported Kituskie v. Corbman (1998), 552 Pa. 275, Klump v. Duffus (1995), 71 F.3d Krahn v. Kinney (1989), 43 Ohio St.3d 103, 538 N.E.2d Lavigne v. Haskell (2002), 112 Wash. App. 677, McDow v. Dixon (1976), 138 Ga. App McKenna v: Forsyth & Forsyth (NY 2001), 280 A.D.2d 79, 720 N.Y.S.2d Power Constructors, Inc. v. Taylor & Hintze (Alaska.1998), 960 P.2d Roman v. Estate of Gobbo (July 23, 2003), 99 Ohio St.3d Rorrer v. Cooke (N.C.1985), 313 N.C. 338, 329 S.E.2d Sitton v. Clements (E.D.Tenn.1966), 257 F. Supp Smith v. Haden (D.D.C.1994), 868 F.Supp Taylor Oil Co. v. Weisensee (S.D.1983), 334 N.W.2d Teodorescu v. Bushnell (1993), 201 Mich. App Vahila v. Hall... 3, 6 Victorson v. Bock Laundry Machine Co. (1975), 37 N.Y.2d 395, 401, 335 N.E.2d 275, iii

6 STATEMENT OF THE FACTS The Crash On May 28, 1997 Kristopher Richardson negligently injured Edward Paterek in an automobile accident.l Paterek was free of any negligence in causing the accident Z A jury ultimately valued the damages sustained by Paterek and his wife at $382, However, Richardson had only $100,000 of auto liability coverage, and no other personal assets or earning capacity with which to compensate Paterek for his injuries 4 The Underlying Case Shortly after the accident, Paterek and his wife, Irene, retained Attorney Jonathon Evans of the law firm of Peterson & Ibold to represent them in a personal injury action against Richardson.5 Evans filed a timely lawsuit against Richardson, but subsequently dismissed it without prejudice and then failed to refile within one year.6 The Malpractice Case On October 2, 2002, the Patereks filed this legal malpractice suit.7 Both Evans and Peterson & Ibold admitted liability for the damages proximately caused by Evans' breach of the standard of care.8 Edward Paterek died in February 2003, and his widow was named executrix of his estate.9 The lawsuit was tried to a jury in December 2004, on the sole issue of damages.10 ^ Supp. p. 1; Stipulation 4 z Supp. p. 1; Stipulation 4 Supp. p. 3; Tr., p. 438 Supp. p. 1; Stipulation 2) 5 Supp. p. 1, 2; Stipulation 5, 6 6 Supp. p. 1, 2; Stipulation 5, 6 Supp.p. 30, et seq.; Complaint Supp. p. 1, 2; Stipulation 5, 6 9 Supp. p. 10; Suggestion of Death; Supp. p. 24, Amended Complaint, 1, 2 " Supp. p. 2; Stipulation 7; See also, the trial transcript, generally I

7 The jury returned a verdict for the Patereks of $382, Interrogatories revealed that the jury awarded $282,000 for Edward's medical bills, pain and suffering, and inability to perform usual activities, and the remaining $100,000 for Irene's loss of consortium.1z Two months later, the trial court entered judgment notwithstanding the verdict, holding that Plainfiff's damages were limited to $100,000, the amount she reasonably could have expected to recover from Richardson.13 The trial court summarized its rationale as follows: The issue of collectibility of the underlying tortfeasor in a legal malpractice action appears to be a matter of first impression in the state of Ohio. After reviewing the case law from other jurisdictions, this Court concludes that if there is evidence or, as in this case a stipulation, that the underlying tortfeasor is uncollectible, the amount of damages Plaintiffs may receive from a negligent attorney is limited to what the Plaintiffs were reasonably certain to receive in the underlying case, plus any additional or other damages proven to exist.14 The trial court noted that, based on their responses to interrogatories, the jury had awarded Paterek no damages for the Defendants' malpractice, above and beyond the lost chance to receive damages from the original tortfeasor:15 The Appeal to the Eleventh District Paterek appealed the order entering judgment, N.O.V. for Evans and the law firm to the Eleventh District Court of Appeals.16 A divided panel of that court reversed and remanded to the trial court for a ruling on Plaintiff's motion for prejudgment interest." The majority agreed with the trial court's observation that "it is clear that Plaintiff could not have received more than Supp. p. 3; Tr., p. 438; Supp. p. 4, Verdict Form. 1Z Supp. p. 3; Tr., p. 438; Supp. p. 5, 6, Jury Interrogatories. 13 App. p n App. p. 38. App. p a App. p. 19. App. p

8 $100,000 from [Richardson] and his insurer".18 However, the majority believed that it was constrained to reverse based on this Court's opinion in Vahila v. Hall: [I]n limiting appellant's damages to the amount she could be expected to receive, the trial court was adopting the "but for" test and the "case within a case" analysis, both of which have been rejected by the Supreme Court of Ohio in the case of Vahila v. Hall. *** As we see it, the trial court incorrectly melded the rejected notion of a "case within a case" developed in the proximate cause decisions onto the element of damages in concluding that appellant's damages were limited to the liability coverage maintained by Richardson. In effect, the trial court made collectibility from Richardson an element of appellant's case. We hold that collectibility was not an element of the case. 19 In her dissenting opinion, Judge Grendel recognized the fundamental flaw in the majority's reasoning, pointing out the disconnect between the majority opinion and the public policy goals of the tort law system: The trial court was correct in holding that "the damages actually caused by the negligence of [Evans and Petersen & Ibold] must be limited to the amount that [the Patereks] could be reasonably certain of receiving had [Evans and Petersen & Ibold] not been negligent." To hold otherwise, would result in a windfall for Patereks simply because they had the misfortune of being the victims of malpractice by attorneys who have deeper pockets than the tortfeasor who harmed Patereks in the first place. Such result is contrary to the purpose of tort law? Judge Grendel fiirther recognized the inapplicability of the rationale of Vahila, decided in the context of disputed proximate cause, to the facts of this case, which present only an issue of damages: 18 App. p App. p. 10, App. p

9 At issue herein is to what extent were the Patereks damaged by the failure to refile the claim, or, in other words, what was the value of their claim. The majority mistakenly equates the value of the claim with the extent of the Patereks' injuries. This is contrary to the requirement in Vahila that "a causal connection [exist] between the conduct complained of and the resulting damage or loss."zl The Court of Appeals for Geauga County remanded the case to the Court of Common Pleas for consideration of Paterek's motion for prejudgment interest. But before the trial court took up that issue, the Defendants sought further review in this Court. The Appeal to this Court On September 27, 2006 Evans and Petersen & Ibold timely filed their Notice of Appeal and Memorandum in Support of Jurisdiction to this Court. On January 26, 2007 this Court accepted the appeal and entered an order directing the Clerk to issue an order for the transmittal of the record from the Court of Appeals for Geauga County, and directing the parties to brief the case in accordance with the Supreme Court Rules of Practice. The Clerk received the record for filing on February 1, 2007 and notified the parties the following day. Accordingly, Evans and Petersen & lbold now request this Court to: (1) reverse the judgment of the Eleventh District Court of Appeals; (2) reinstate the Geauga County Court of Common Pleas' judgment notwithstanding the verdict and awarding the sum of $100,000 to the Plaintiff as the full measure of her damages against the Defendants; and (3) establish a clear rule of law making the original tortfeasor's collectibility an element of the plaintiff's proof in a legal malpractice claim arising out of the failure to competently prosecute a civil lawsuit. Z' App. p

10 ARGUMENT IN SUPPORT OF PROPOSITION OF LAW Proposition of Law: In a legal malpractice action arising out of an alleged failure to competently prosecute a civil lawsuit, recovery for the lost opportunity to collect in the underlying litigation cannot exceed the damages Plaintiff would have collected had the attorney defendant not been negligent. A. The Proposition of Law Presents an Issue of First Impression in Ohio. Until now, no Ohio case had squarely addressed the measure of damages in a legal malpractice case arising out of an attorney's failure to competently prosecute a civil lawsuit. In Cunningham v. Hildebrand,ZZ the Eighth District Court of Appeals, in dicta, affinned J.N.O.V. for an admittedly negligent lawyer, and quoted jury instructions that included the following: The plaintiff must prove by a preponderance of the evidence that if the bankruptcy court had considered his claim it would have awarded him some amount, or that he could have negotiated a settlement for some amount with the attorneys for Continental Airlines.Z3 In this case, the Eleventh District Court of Appeals held that "collectibility [i]s not an element" of a legal malpractice case against an attorney who allegedly failed to competently prosecute a civil action for damages on behalf of a client. For the following reasons, the rule announced by the Eleventh District Court of Appeals in this case of first impression is contrary to existing precedent from this Court and the public policy of this state. Moreover, if allowed to stand, the Eleventh District's opinion would place Ohio at odds with every other state in the nation that has considered the issue. Accordingly, the decision of the Court of Appeals should be reversed and the judgment of the trial court reinstated. u(2001), 142 Ohio App.3d 218, 755 N.E.2d 384 Z' Id., at

11 B. Existing Ohio Law Supports the Conclusion that the Tortfeasor's Collectibility is a Proper Element of the Measure of Damages in a Legal Malpractice Claim Arising out of the Failure to Competently Prosecute a Civil Suit. In Vahila v. Hall,24 this Court set forth the standard for proving a legal malpractice claim: [T]o establish a cause of action for legal malpractice based on negligent representation, a plaintiff must show (1) that the attorney owed a duty or obligation to the plaintiff, (2) that there was a breach of that duty or obligation and that the attorney failed to conform to the standard required by law, and (3) that there is a causal connection between the conduct complained of and the resulting damaee or loss. In Vahila, the issue was whether the Plaintiff was required to prove that "she would have been successful in the underlying matter," in order to overcome the defendants' motion for summary judgment. Vahila involved "multiple negligent acts and/or omissions" arising from the attorneys' defense of Vahila in a series of civil, criminal and administrative matters. The focus of the Court's inquiry in that case was on whether Plaintiff had to prove a "case within a case" in order to establish the element of proximate cause. In other words, the issue was whether Vahila was required to prove as an element of her case, that absent the attorneys' negligence, she would have prevailed in each of those underlying proceedings. The Vahila Court held that the plaintiff was not so obligated and reversed summary judgment for the attorneys. The Vahila Court rejected any "blanket proposition" that would require every plaintiff to "prove, in every instance, that he or she would have been successful in the underlying matter." Importantly, Vahila never rejected out of hand the notion that some legal malpractice plaintiffs might have to offer "some evidence" relevant to the original action in order to prove a legal malpractice claim: 24 (1997), 77 Ohio St.3d 421, 674 N.E.2d 1164 (emphasis added). 6

12 We are aware that the requirement of causation often dictates that the merits of the malpractice action depend upon the merits of the underlying case. Naturally, a plaintiff in a legal malpractice action may be required, depending on the situation, to provide some evidence of the merits of the underlying claim. In deciding Vahila, this Court clearly anticipated future cases, like this one, that would be unencumbered by the complex facts presented in that case. In Vahila, the allegedly negligent attorney was defending his clients in multiple civil, criminal and administrative cases. The alleged negligence involved the attotney's failures to disclose crifical information to the client during settlement negotiations and plea bargains. The Vahila Court quoted from Krahn v. Kinney,25 in describing the nature of the wrong done the client by the attorney's negligence in failing to competently defend him: [The client] incurred extra attorney fees in rectifying [the negligent attorney's] failure to appear at the original commission hearing. The injury is not the penalty ultimately imposed by the commission, but the expenses involved in rectifying Kinney's failure. [The client] states a cause of action regardless of whether the ultimate penalty imposed by the commission is reversed. In a case like this one, where the alleged malpractice is committed by an attorney representing a plaintiff, rather than a defendant, the nature of the wrong done the client is completely different. There is no complex proximate cause issue, or any need to prove a "case within a case." Indeed, in this particular case, virtually every key fact was stipulated before trial. As the Vahila Court recognized, "a plaintiff in a legal malpractice action may be required, depending on the situation, to provide some evidence of the merits of the underlying claim." Where the wrong is simply the lost opportunity to pursue a claim, "that situation" requires the plaintiff to prove both the extent of her damages, and the probability that they would have actually been collected. 25 (1989), 43 Ohio St.3d 103, 538 N.E.2d

13 The Vahila Court intended its holding to be much more flexible than what the Eleventh District Court of Appeals gave it credit for. The court below misread Vahila as standing for the proposition that a plaintiff in a legal malpractice case never has to prove the merits of the underlying suit. But, Vahila was only intended to free malpractice plaintiffs with otherwise meritorious claims from the sometimes impossible burden of always having to prove proximate cause in the context of a "case within a case." The Vahila Court never intended to provide malpractice claimants with a windfall recovery if their lawyer happened to have deeper pockets than the original tortfeasor. Nor did the Vahila Court intend to hold attorneys liable for damages other than those proximately caused by their own negligence. To the contrary, Vahila reaffirmed that the plaintiff in a legal malpractice action always has the burden of establishing "that there is a causal connection between the conduct complained of and the resulting damage or loss." The "resulting damage or loss" referred to can logically mean only the damage or loss resulting from the attorney's "conduct complained of," not the original tortfeasor's. Viewed from this perspective, Vahila implicitly stands for the propositionthat the original tortfeasor's collectibility is a necessary element of a malpractice case based on a lost chance to recover from the original wrongdoer. C. The Rule Announced by The Court Below is Contrary to Ohio's Public Policy. The purpose tort law is to provide a means of redress to individuals for damages suffered as a result of tortious conduct.26 Tort law is guided largely by public policy considerations Fred Siegel Co., L.P.A. v. Arter & Hadden (1999), 85 Ohio St.3d 171, 707 N.E.2d Hunt v. Waterbury Farrel Mfg. Ltd. Partnership (December 6, 1996), Darke App. No. 1409, 1996 WL , citing, Victorson v. Bock Laundry Machine Co. (1975), 37 N.Y.2d 395, 401, 335 N.E.2d 275,

14 "Where a loss must be borne by one of two innocent persons, it should be borne by the person who occasioned the loss.... [S]ound public policy requires that [a] Defendant be held accountable for the injuries caused by his [wrongful conduct]."zs In a legal malpractice case against a negligent personal injury lawyer, the damage caused by the lawyer's wrongful conduct is not pain, suffering, medical bills, lost wages or lost consortium., it's the lost opportunity to obtain compensation for those wrongs from the original tortfeasor. The mle adopted by the intermediate court of appeals in this case mistakenly holds the negligent attomey liable for damages he didn't cause. By establishing a rule that requires consideration of the original tortfeasor's collectibility, this Court can assure that the malpractice defendant compensates his victim for the injury he has caused, not for injuries caused by another. When viewed from this perspective of aligning actionable conduct with the damages proximately caused thereby, the underlying tortfeasor's collectibility is clearly an integral aspect of the of the measure of damages in a malpractice claim arising out of the failure to competently prosecute a civil suit. D. The Majority of Other Jurisdictions Consider the Original Tortfeasor's Collectibility In Determining Damages. Ohio is among the few states that have yet to determine the measure of damages in a legal malpractice case arising out of an attorney's failure to competently prosecute an underlying civil lawsuit. A survey of the jurisdictions that have addressed the issue reveals a clear national trend toward taking the collectibility of the tortfeasor into account as a relevant factor in reaching a just award. In fact, while some states make the underlying defendant's collectibility an element ZB Roman v. Estate of Gobbo (July 23, 2003), 99 Ohio St.3d 260, quoting, Canis v. Fleps (Jan. 6, 1992), Mahoning C.P. No. 88 CV

15 of the plaintiff's case in chief and others make it an affirmative defense, no other state has adopted the rule articulated by the Eleventh District Court of Appeals in this case, essentially finding it irrelevant. The majority rule in the United States is that the plaintiff in a legal malpractice action has the burden of proving by a preponderance of the evidence that: (1) he would have recovered a judgment in the underlying action; (2) the amount of that judgment; and (3) the de g r e of collectibility of such judgment 29 The rationale for the majority rule is that the value of a case does not increase merely because it is against an attorney rather than the underlying defendant. For example, Pennsylvania requires the trier of fact to consider collectibility of the lost judgment in assessing damages in a legal malpractice action.30 That state's Supreme Court reasoned that the legal malpractice plaintiff should only be compensated for his or her actual losses, which it defined as "the recovery the plaintiff lost in the underlying action due to the attomey's negligence."31 The Pennsylvania Supreme Court further noted: It would be inequitable for the plaintiff to be able to obtain a judgment against the attorney which is greater than the judgment that the plaintiff could have collected from the third party; the nlaintiff would be receiving a windfall at the attorney's expense.32 Likewise, in Iowa, courts have held that the purpose of requiring plaintiffs in legal malpractice cases to prove the collectibility of the judgment is to prohibit plaintiffs from being 29Garcia v. Kozlov (2004), 179 N.J. 343 (emphasis added). 30Kituskie v. Corbman (1998), 552 Pa. 275, (While Kituskie holds that the lawyer carries the burden of proof on collectibility, it is clear that regardless of burden, collectibility must be considered) 3IId. 321d. at 283(emphasis added). 10

16 placed in a better position as a result of the malpractice than they would have been had the attorney not been negligent.33 Washington also requires proof of the collectibility of the underlying judgment as a component of damages in a legal malpractice case: In a malpractice action, a plaintiff s "actual injury" is measured by the amount of money she would have actually collected had her attorney not been negligent... Hypothetical damages beyond what the plaintiff would have genuinely collected from the jtdgment creditor are not a legitimate portion of her actual injury; awarding her those damages would result in a windfa11.3a In Klump v. Duffus35, a federal court applied Illinois law to a case in which the attorney had failed to file a personal injury lawsuit within the statute of limitations. As here, the parties stipulated that the attorney/defendant was negligent and that the suit against the underlying tortfeasor would have been successful. Nor did the attorney/defendant challenge the jury's determination that the lost case had a value of $424,000. Rather, he argued that he should only be required to pay the portion of the verdict that was collectible against the underlying tortfeasor. The court agreed, holding: A plaintiff is to be returned only to the same position she would have occupied had the tort not occurred. Had Duffus filed Klump's case in a timely manner and thus not committed the tort, Klump's position would have been that of a person possessing a $424,000 judgment against an individual who was unemployed, had no assets, and had only a $25,000 insurance policy. Hypothetical damages above the amount that Klump could genuinely have collected from Eaves are not a legitimate portion of her "actual injury."36 33Kemin Ind. v. KPMG (2002), Iowa App. No. WL , unreported, page 2; 34Lavigne v. Haskell (2002), 112 Wash. App. 677, (emphasis in original). 3s (1995), 71 F.3d d. at

17 The Klump court noted that holding the attorney responsible for damages the plaintiff could never have collected from the original tortfeasor would be tantamount to awarding punitive damages against the attomey.37 In addition to New Jersey, Iowa, Washington, and Illinois, numerous other states, including Texas, Florida, New York, New Hampshire, California, Massachusetts North Carolina, Tennessee, Nebraska South Dakota, Kansas, and Georgia have likewise concluded that proof of the collectibility of the underlying judgment is an element of the Plaintiffs case in chief.38 In addition to Pennsylvania, states holding that collectibility is an affirmative defense to be pled and proved by the defendant include the District of Columbia, Alaska, Louisiana, Maine, and Michigan.39 It's clear that, without regard to burden of proof, virtually every jurisdiction that has considered the issue agrees that the collectibility of the judgment is a relevant factor to be considered by the jury in awarding damages in a legal malpractice case arising out of the failure to competently prosecute a civil lawsuit. Because the public policy rationales articulated by those courts clearly resonate with Ohio's public policy goals, the Court should reverse the judgment of 37Id. at See, e.g., Ballesteros v. Jones (1999), 985 S.W. 485, Texas; Fernandes v. Barrs (1994), 641 So.2d 1371, Florida; McKenna v. Forsyth & Forsyth (NY 2001), 280 A.D.2d 79, 720 N.Y.S.2d 645; Copp v. Atwood (Jan. 24, 2005), D.N.H. No JD, unreported, 2005 WL ; DiPalma v. Seldman (Cal.App.1994), 27 Ca1.App.4t 1499; Jernigan v. Giard (Ma.1986), 398 Mass. 721, 200 N.E.2d 806; Rorrer v. Cooke (N.C.1985), 313 N.C. 338, 329 S.E.2d 355; Sitton v. Clements (E.D.Tenn.1966), 257 F.Supp. 63; Eno v. Watkins (Neb.1988), 229 Neb. 855, 429 N.W.2d 371; Taylor Oil Co. v. Weisensee (S.D.1983), 334 N.W.2d 27; Augustine v. Adams (D.Kan.1997), 1997 WL ; and McDow v. Dixon (1976), 138 Ga. App Smith v. Haden (D.D.C.1994), 868 F.Supp. 1; Power Constructors, Inc. v. Taylor & Hintze (Alaska.1998), 960 P.2d 20; Jenkins v. St. Paul Fire & Marine Ins. Co. (La.1982), 422 So.2d 1109; Jourdain v. Dineen (Me.1987), 527 A.2d 1304; Teodorescu v. Bushnell (1993), 201 Mich. App. 260;. 12

18 the Eleventh District court of Appeals and reinstate the trial court's order remitting the verdict to the amount of the tortfeasor's liability insurance. CONCLUSION For all of the foregoing reasons, Defendants-Appellants Petersen & Ibold and Jonathon Evans request this Court to: (1) reverse the judgment of the Eleventh District Court of Appeals; (2) reinstate the Geauga County Court of Common Pleas' judgment notwithstanding the verdict awarding the sum of $100,000 to the Plaintiff as the full measure of her damages against the Defendants; and (3) establish a clear rule of law making the original tortfeasor's collectibility an element of the plaintiff's proof in a legal malpractice claim arising out of the failure to competently prosecute a civil lawsuit. Respectfully submitted, Attorneys fokdgendant-appellant, 13

19 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Merit Brief of Appellants has been mailed this 9th day of March, 2007 to: LEON M. PLEVIN and EDWARD FITZGERALD, of the law finn of Plevin & Gallucci, 55 Public Square, Suite 2222 Cleveland, Ohio 44113; and, PAUL W. FLOWERS, of the law firm of Paul W. Flowers Co., L.P.A., Terminal Tower, 35"' Floor, 50 Public Square, Cleveland, Ohio 44113, Attorneys for Plaintiff-Appellee; NICHOLAS D. SATULLO and JOSEPH W. BORCHELDT, of the law firm of Reminger & Reminger Co., L.P.A., 525 Vine Street, Suite 1700, Cincinnati, Ohio 45202, Attorneys for Amicus Curiae, Ohio Association of Civil Trial Attomeys; ALAN M. PETROV, TIMOTHY J. FITZGERALD and MONICA A. SANSALONE of the law firm of Gallagher Sharp, Bulkley Building, Sixth Floor, 1501 Euclid Avenue, Cleveland, Ohio , Attomeys Amicus Curiae, Minnesota Lawyers Mut. Ins. Co.; and, JASON WINTER of the law fir of Janik & Dorman, L.L.P., 9200 South Hills Blvd., Suite 300, Cleveland, Ohio , Attorney for Amicus Curiae, Zurich Insurance Company N (00bff686) N ( ) ants d Jonathon Evans 14

20 IN THE OHIO SUPREME COURT CASE NO. IRENE F. PATEREK, et cet, etal s Plaintiff-Appellee, V. PETERSEN & IBOLD, et al., D efen dants-app ellants. APPEAL FROM THE GEAUGA COUNTY COURT OF APPEALS, ELEVENTH APPELLATE DISTRICT COURT OF APPEALS CASE NO: 2005-G-2624 NOTICE OF APPEAL OF APPELLANTS PETERSEN & IBOLD AND JONATHAN EVANS LEON M. PLEVIN EDWARD FITZGERALD Plevin & Gallucci 55 Public Square, Suite 2222 Cleveland, Ohio (216) Fax(216) PAUL W. FLOWERS Paul W. Flowers Co., L.P.A. Terminal Tower, 35's Floor 50 Public Square Cleveland, Ohio (216) Fax (216) Att.omeys for Plaintiff-Appellee TIMOTHY D. JOHNSON ( ) GREGORY E. O'BRIEN ( ) Weston Hurd, L.L.P Ternunal Tower 50 Public Square Cleveland OH (216) Attorneys for Defendant-Appellant, U SEP MARCIA J. MENGEL; CLERK SUPREME COURT OF OHIO APP 1

21 NOTICE OF APPEAL OF APPELLANTS PETERSEN & IBOLD AND JONATHAN EVANS Appellants, Petersen & Ibold and Jonathan Evans hereby give notice of appeal to the Supreme Court of Ohio from the judgment of the Geauga Cowity Court of Appeals, Eleventh Appellate District, entered in Court of Appeals Case No: 2005-G-2624 on August 14, This case is one of public or great general interest. Respectfully submitted, SON ( ) BRIEN ( ) n Hqd ^dllon Paisley & Howley L.L.P. 500 Tertnsndt Tower 50 Public Square Cleveland OH (216) Attorneys for Defendant-Appellant, CERTIFICATE OF SERVICE I hereby certify that a copy of the foregonig Notice has been mailed to LEON M. PLEVIN aud EDWARD FITZGERALD, of the law fimr of Plevin & Gallucci, 55 Public Square, Suite 2222 Cleveland, Ohio 44113; and, PAUL W.FLOWERS; ofth8law firm of Paul W. Flowers Co., LP.A., Terminal Tower, 35a' Floor, 50 Public Square, Cleveland, Ohio 44113,Agomeys for Plaintiff- Appellee this 26th day of September, ) BRIEN ( ) fendants d and Jonathon Evans 2 APP 2

22 AUG STATE OF OHIO COUNTY OF GEAUGA )SS. IRENE F. PATEREK, individuallyand EXECUTRIX OF THE ESTATE OF EDWARD F. PATEREK, DECEASED, - vs - Plaintiff-Appellant, PETERSEN & IBOLD, et al., Defendants-Appellees. IN THE COURT OF APPEALS ELEVENTH DISTRICT L ^,.::nurt OF APPE4@.S S I : `'cP4lSE M. P1.WtNSlC vl EP.!( OF COUr^,TS JUDGMENT ENTRY:""' CASE NO G-2624 I For the reasons stated in the opinion of this court, it is the judgment and order of this court that the judgment of the trial court is reversed. The matter is hereby remanded to the trial court for further proceedings consistent with the opinion. COLLEEN MARY O'TOOLE, J., concurs, DIANE V. GRENDELL, J., dissents with Dissenting Opinion. APP 3

23 IRENE F. PATEREK, INDIVIDUALLY AND EXECUTRlX OF THE ESTATE OF EDWARDF.PATEREK,DECEASED, THE COURT OF APPEALS ELEVENTH APPELLATE DISTRICT GEAUGA COUNTY, OHIO 0 P I N 10 N IN Coi1RTOf; ArPEA«CaCG t ^, ZODG DENiSE- M. K AMiNSKI CLERIC OF COUFTs GEA JCfi CC':,a!-Y - vs - Plaintiff-Appellant, ASE NO G-2624 PETERSEN & IBOLD, et al., Defendants-Appellees. Civil Appeal from the Court of Common Pleas, Case No. 02 PT Judgment: Reversed and remanded. Leon M. Plevln, 1I1 and Edward Fitzgerald, 55 Public Square, Suite 2222, Cleveland, OH 44113, and Paul W. Flowers, Terminal Tower, 35th Floor, 50 Public Square, Cleveland, OH (For Plaintiff-Appellant). Timothy D. Johnson, 1900 The Tower at Erieview, 1301 East Ninth Street, Cleveland, OH (For Defendants-Appellees). WILLIAM M. O'NEILL, J. {11} This is a fegal. ma3practice action. Appellant, Irene Paterek, individually and as executrix of the estate of Edward F. Paterek was awarded judgment following a jury verdict in the amount of $382,000. The verdict of $382,000 was rendered against both appellees, Jonathon Evans ("Evans") and the law firm of Petersen & lbold. Following the verdict. Evans and Petersen & Ibold filed a motion for judgment APP 4

24 notwithstanding the verdict. The trial court reduced the amount of the award to $100,000. On review, we reverse the judgment of the trial court. { 2} Evans worked as an attorney for Petersen & lbold. In 1997, he was i retained to represent the Patereks in connection with a personal injury lawsuit stemming from injuries sustained by Edward F, Paterek in a motor vehicle accident caused by Kristopher Richardson ("Richardson"). {13} Evans filed suit against Richardson on behalf of the Patereks in the Geauga County Common Pleas Court in This suit was dismissed by the Patereks pursuant to Civ.R. 41(A)(1) in {14} Evans again filed suit against Richardson in behalf of the Patereks, but the suit was untimely, having been filed beyond the one-year deadline allowed by R.C , and was dismissed by the Geauga County Common Pleas Court. {15} On December 5, 2001, the Patereks were notified by the law firm that it was negligent in failing to timely refile their lawsuit against Richardson. { G} tn October 2002, the Patereks filed an action for legal malpractice against Evans and the law firm of Petersen & Ibold. Shortly thereafter, Mr. Paterek died and Mrs. Paterek was substituted as his legal representative to represent his interests in the legal malpractice action. She then filed an amended complaint in her representative capacity. The amended complaint restated the allegations of the original complaint. The law firm and Evans filed an answer to the amended complaint in which they admitted liability for failing to timely refile the lawsuit for the Patereks. {17} Mrs. Paterek filed a second amended complaint against the Patereks' own insurance carrier, One Beacon Insurance, in respect to their UM/UIM claim. At the time 2 APP 5

25 of the accident, the Patereks maintained $250,000 of UM/UIM coverage. This claim was voluntarily dismissed without prejudice by appellant prior to trial. {18} During discovery, appellant was advised that the limit of Richardson's insurance coverage was $100,000. {y9} The law firm and Evans filed a motion for partial summary judgment. They argued that the maximum recovery to be had by.appellant was $100,000, representing the maximum insurance coverage Richardson had in force at the time of the accident. They further argued that appellant had a viable UMIUIM claim for $250,000. Thus, they requested an order from the trial court capping appellant's damages at $100,000. {110} In overruling the motion for partial summary judgment, the trial court stated: "[a]lthough Plaintiffs will have to prove the 'case within the case', such proof does not have to go so far as to demonstrate that the tortfeasor in the underlying case was not judgment proof or, conversely stated, that the tortfeasor had assets from which a judgment could be collected," {111} Prior to trial, the parties entered into a stipulation that Richardson did not have personal assets nor the earning capacity, either at the time of the accident or at the time of the jury verdict, to satisfy a judgment in excess of $100,000. {912} The trial court charged the jury on the issue of damages as follows: {113} "You have been previously instructed that the defendants Petersen & Ibold and Jonathon Evans were negligent. If you find that the defendants' negligence was the proximate cause of plaintiffs' damages, you will decide by the greater weight of the evidence an amount of money that will reasonably compensate the pfaintiffs for the actual injuries proximately caused by the negligence of the defendants. The first 3 APP 6

26 consideration is to determine what damages, if any, may have been sustained by Edward Paterek andlor Irene Paterek as a result of the automobile accident on May 28`", 1997." {114} The trial court then spelled out for the jury the types of special damages and injuries the jury could consider in making a damages award. It then elaborated on other damages the jury could consider: {915} "The second consideration is to determine what damages, if any, may have been sustained by Edward Paterek andlor Irene Paterek as a result of the failure of defendants to successfully prosecute the cfaims against [Richardson]. Any amounts that you have determined will be awarded to the plaintiffs for any element of damages shall not be considered again or added to any other element of damages." {116} On December 20, 2004, the trial court entered judgment pursuant to the jury verdict of $382,000. Evans and Petersen & Ibold timely filed a motion for judgment notwithstanding the verdict pursuant to Civ.R. 50(B), In their motion, they asked the trial court to reduce the amount they were obligated to pay from $382,000 to $100,000. {117} On February 16, 2005, the trial court issued an order reducing the jury verdict from $382,000 to $100,000, together with a decision explaining its reasons for doing so. The trial court explained its rationale thusly: {918} "in this action, the jury determined that plaintiff was entitled to a total of $382,000 in damages. In response to interrogatories submitted by plaintiffs, the jury demonstrated that it reached its damages amounts based upon Mr. Paterek's medical bills, his pain and suffering, his inability to perform usual activities, and upon Mrs. Paterek's loss of consortium. The amounts the jury determined for each of the 4 APP 7

27 aforementioned elements of damages equal the total amount of the jury award. Although the instructions given to the jury. permitted them to consider awarding damages beyond the amounts of [the Patereks'] underlying personal injury and loss of consortium claims, the interrogatories establish that the jury chose not to do so. [Footnote omitted.] The jury limited its award to those sums it determined arose from Mr. Paterek's personal injury and Mrs. Paterek's loss of consortium." {119} The trial court then went on to consider whether the verdict in favor of appellant should be upheld, because of the possibility of collecting UM/UIM proceeds against the Patereks' own insurer, and held that it could not speculate that someday appellant might "hit the jackpot" and actually collect another $150,000 against the Patereks' own insurer. {120} Appellant timely filed an appeaj from the judgment entry of February 16, 2005, granting the motion for judgment notwithstanding the verdict. {121} Appellant has raised two assignments of error. The first assignment of error is as follows: {122} "The trial judge erred, to plaintiff-appellant's considerable detriment, by granting defendant-appellees' motionfor judgment notwithstanding the verdict and reducing the total judgment from $382, to $100, " { 23} In reviewing a trial court judgment where a motion for judgment notwithstanding the verdict has been granted, an appellate must address the issue as 5 APP 8

28 one of law: {q24} "'A motion for directed verdict or a motion for judgment notwithstanding the verdict does not present factual issues, but a question of law, even though in deciding such a motion, it is necessary to review and consider the evidence."'' {125} Therefore, the standard of appellate review of a trial court's ruling on a motion forjudgment notwithstanding the verdict is de novo.2 { 26} Civ.R. 50(B) provides, in relevant part: {127} "Whether or not a motion to direct a verdict has been made or overruled and not later than fourteen days after entry of judgment, a party may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion[.]" {128} The trial court applies the following test to a motion for judgment notwithstanding the verdict: {929} "The trial judge must construe the evidence most strongly in favor of the non-movant and if upon all the evidence there is substantial evidence to support the non-movant's position upon which reasonable minds may reach different conclusions, the motion must be denied. *** The trial judgedoes.not determine the weight of the evidence or the credibility of the witnesses, '*" and although he examines the materiality of the evidence, he does not look at the conclusions to be drawn."3 {Q30} This court's analysis under the first assignment of error turns on whether 1. Ruta v. Breckenridge-Remy Co. (1982), 69 Ohio St.2d 66, 68, quoting O'Day v. Webb (1972), 29 Ohio St.2d 215, paragraph three of the syllabus. 2. Natl. City Bank v. Rhoades, 150 Ohio App.3d 75, 2002-Ohio-6083, at (Internal citations omitted.) Cardinal v. Family Foot Care Centers, Inc. (1987), 40 Ohio App.3d 181, 183, citing Ruta v. Breckenndge-Remy Co., supra, at APP 9

29 the trial court was correct in reducing the amount awarded in the verdict to a lesser amount due to the uncofiectability of Richardson. We agree with the trial court that "it is clear that Plaintiff could not have received more than $100,000 from [Richardson] and his insurer." However, we do not agree with the trial court's statement that "the damages actually caused by the negiigence of [Evans and Petersen & lboldj must be limited to the amount that the Plaintiff could be reasonably certain of receiving had [Evans and Petersen & Ibold] not been negligent," because in limiting appeilant's damages to the amount she could be expected to receive, the trial court was adopting the "but for" test and the "case within a case" analysis, both of which have been rejected by the Supreme Court of Ohio in the case of Vahila v. Hall. {131} A discussion of the decision in the case of Vahila v. Hall will be helpful to this analysis. {132} The plaintiffs in that case sued their former attorneys for negligent representations conducted by the attorneys in various civil, criminal, and administrative matters. The trial court granted summary judgment to the attorneys, because the plaintiffs were required to, but could not, prove that they would have been successful in the underlying civil; criminal, and administrative matters in which the alleged malpractice had occurred. The appellate court affirmed the summary judgment. {133} On appeal to the Supreme Court of Ohio, that court rejected the "but for" test inherent in the "case within a case" approach: {134} "[W]e reject any finding that the element of causation in the context of a legal malpractice action can be replaced or supplemented with a rule of thumb requiring 4. Vahila V. Hall (1997), 77 Ohio St.3d APP 10

30 that a plaintiff, in order to establish damage or loss, prove in every instance that he or i she would have been successful in the underlying matter(s) giving rise to the complaint i5 {135) That court based its decision on "[t]he inequity of requiring appellants to prove that they would have been successful in the underlying matters giving rise to their malpractice action[.]i6 {136} That court went on to hold as follows: {137} "[W]e hold that to establish a cause of action for legal malpractice based on negligent representation, a plaintiff must show (1) that the attorney owed a duty or obligation to the plaintiff, (2) that there was a breach of that duty or obligation and that the atforney failed to conform to the standard required by law, and (3) that there is a causal connection between the conduct complained of and the resulting damage or loss. """ Naturally, a plaintiff in a legal malpractice action may be required, depending on the situation, to provide some evidence of the merits of the underlying claim. " " However, we cannot endorse a blanket proposition that requires a plaintiff to prove, in every instance, that he or she would have been successful in the underlying matter."7 {138} 7heVahila case turned on the issue ofproximatecause. By incorrectly granting the motion for judgment notwithstanding the verdict, the trial court in the instant matter was not acting erroneously with respect to proximate cause, but with respect to damages. {539} In other words, the trial court, in its decision, limited consideration of 5. Id. at Id. at (Internal citations omitted,) Id. at APP 11

31 damages to the collectability of damages in the underlying case against Richardson. This was a "case within a case" analysis. The trial court stated that a "case within a case" approach is necessary to successfully prosecute a legal malpractice action: not only must the plaintiff prove the elements of negligence against the attorney, but he must also prove as part of his case-in-chief that the underlying case handled by the attorney could have been prosecuted successfully and to plaintiffs benefit had the attorney not committed maipractice. By this approach, the underlying case serves as a measuring stick for the amount of recovery to be had against the attomey for committing malpractice. Thus, when the trial court said that the jury verdict only reflected the jury's oonsideration of the Patereks' injuries attributable to the motor vehicle accident, and found that, under the circumstances, only $100,000 was recoverable from the Richardson's liability insurance carrier, it was saying, in effect, that the "case" against Evans and Petersen & Ibold was admitted, but that the value of the underlying "case" was limited to the $100,000 that could be collected from Richardson's liability insurance carrier. - {140} As stated above, the "case within a case" approach was rejected by the Supreme Court of Ohio in Vahila v, Haff.e {141} As we see it, the trial court incorrectly melded the rejected notion of a "case within a oase" developed in the proximate cause decisions onto the element of damages in concluding that appellant's damages were limited to the liability coverage maintained by Richardson. In effect, the trial court made collectability from Richardson an element of appellant's case. We hold that collectability was not an element of the 8. Id. 9 APP 12

32 case {142} The trial court's analysis actually creates a new legal theory in the area of legal malpractice: a case within a case within a case. That is, the trial court was unwilling to extend its own notion of collectability to a second level, meaning that it was unwilling to predict that on top of the $100,000 appellant could collect from Richardson's insurer she could also collect another $150,000 from the Patereks' own insurer under their UM/UIM coverage. We hold today that this exercise misses the point of the Vahila v. Hall case and is irrelevant in light of that case. The issue of whether appellant could collect from the Patereks' own carrier on their UM/UIM coverage was not submitted to the jury, and this court declines to weigh in as to whether such proceeds would ever be received. That issue is certainly not before us in this appeal. {143} Viewing the instant case from the standpoint of damages, damages are recoverable in the full amount. As stated by the Supreme Court of Ohio, in the case of Fantozzi v. Sandusky Cement Prod. Co.: {144} 'The fundamental rule of the iaw of damages is that the injured party shall have compensation for all of the injuries sustained. "' Compensatory damages are intendedtornake-whole the plaintiff for thewrong done tohim or herby the defendant. Compensatory damages are defined as those which measure the actual loss, and are allowed as amends therefore."9 {145} Under Civ.R. 50(B) the trial court had no duty to examine the collectability of Richardson. This consideration was irrelevant under Vahila and Fantozzi. We 9. (Internal citations omitted.) Fantozzi v. Sandusky Cement Prod. Co. (1992), 64 Ohio St.3d 601, APP 13

33 accept that the jury limited its verdict of $382,000 to the personal injuries suffered by the Patereks, and did not enhance the award with any other damages that may have related to the malpractice committed by Evans and Petersen & Ibold, but this fact by itself did not enable the trial court to step in and reduce the jury verdict due to considerations of collectability of the verdict. Its duty was to examine whether the verdict was supported by "substantial evidence," not whether the verdict was collectible. 146} The first assignment of error is with merit. {147} Appellant's second assignment of error is as follows: {148} "The trial judge abused his discretion by denying plaintiff-appellant's mofion for pre-judgment interest." {144} On December 28, 2004, following the entry of judgment of the trial court pursuant to the jury's verdict, appellant filed a motion for prejudgment interest. The trial court overruled this motion on February 16, {150} Appellant does not support this assignment of error with argument that the trial court committed error in failing to grant her motion for prejudgment interest. Instead, she argues that, in the event the trial court's judgment is reversed pursuant to assignment of errornumber one, she should beentitledto a hearing on her motion for prejudgment interest. It turns out that this assignment of error is not truly ah assignment of error, but is more in the nature of a request for relief in the event the judgment of the trial court is reversed. Thus, appellant argues: "[i]n the event that this Court concludes that [appellantj is entitled to more than a judgment of $100,000 against [Evans and Petersen & Ibold], then the denial of pre-judgment interest should also be reversed and the proceedings remanded for a hearing in accordance with R.C (C)." lt APP 14